Stocks swing high, then fall

NEW YORK - Spooked traders unraveled a rally in stocks late yesterday as the downbeat assessment of a bank touched off fears that the market is getting overheated.

The Dow Jones industrial average ended down 92 points after having risen 78 points earlier in the day to a new high for the year.

Analysts cited the note on Wells Fargo & Co. from banking analyst Richard X. Bove as the source of the drop, but they also said a mix of complacency and lingering concerns about the pace of the market's climb in the last seven months left stocks ripe for a hit.

Joe Saluzzi, co-head of equity trading at Themis Trading L.L.C., said the note was a reminder of troubles still in the economy and was enough to scare many traders.

"They all ran for the exits at the same time," he said.

The slide in the final hour of trading was reminiscent of the types of big swings seen a year ago at the height of the financial crisis.

But analysts said the reasons for the latest slide had been building throughout the day: Major stock indexes touched their highest levels in a year, the dollar extended its drop, oil rose above $82 a barrel, and Wal-Mart Stores Inc. said it was cutting prices, a sign consumers are still struggling.

The pullback comes as analysts say some investors have become too relaxed. Todd Colvin, vice president at MF Global Ltd., noted: "We're starting to see, 'Wait a minute, we're not out of the woods yet.' "

The Dow Jones industrial average fell 92.12, or 0.92 percent, to 9,949.36, just above its low of the day. It was the biggest point and percent drop since Oct. 1. The Dow closed above 10,000 last week for the first time in a year.

The broader Standard & Poor's 500 index fell 9.66, or 0.89 percent, to 1,081.40, after reaching 1,101.36, its highest level in the last year. The Nasdaq composite index fell 12.74, or 0.59 percent, to 2,150.73.

Two stocks fell for every one that rose on the New York Stock Exchange, where consolidated volume came to 5.7 billion shares compared with 5.4 billion Tuesday.

Bond prices fell, pushing yields higher. The yield on the benchmark 10-year Treasury note rose to 3.39 percent from 3.34 percent late Tuesday.